2017 Q2 Form 10-Q Financial Statement

#000109428517000075 Filed on May 11, 2017

View on sec.gov

Income Statement

Concept 2017 Q2 2016 Q2
Revenue $566.1M $530.5M
YoY Change 6.71% -8.17%
Cost Of Revenue $357.0M $324.8M
YoY Change 9.91% -9.2%
Gross Profit $209.1M $205.7M
YoY Change 1.65% -6.5%
Gross Profit Margin 36.94% 38.77%
Selling, General & Admin $154.3M $144.8M
YoY Change 6.56% -4.17%
% of Gross Profit 73.79% 70.39%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $22.80M $21.10M
YoY Change 8.06% -7.46%
% of Gross Profit 10.9% 10.26%
Operating Expenses $154.3M $144.8M
YoY Change 6.56% -4.17%
Operating Profit $54.80M $60.90M
YoY Change -10.02% -11.61%
Interest Expense $8.200M $5.700M
YoY Change 43.86% -5.0%
% of Operating Profit 14.96% 9.36%
Other Income/Expense, Net -$9.300M -$1.300M
YoY Change 615.38% -138.24%
Pretax Income $40.60M $53.90M
YoY Change -24.68% -18.7%
Income Tax $10.10M $14.90M
% Of Pretax Income 24.88% 27.64%
Net Earnings $30.50M $39.00M
YoY Change -21.79% -19.25%
Net Earnings / Revenue 5.39% 7.35%
Basic Earnings Per Share $0.87 $1.13
Diluted Earnings Per Share $0.84 $1.11
COMMON SHARES
Basic Shares Outstanding 35.10M shares 34.40M shares
Diluted Shares Outstanding 36.10M shares 35.20M shares

Balance Sheet

Concept 2017 Q2 2016 Q2
SHORT-TERM ASSETS
Cash & Short-Term Investments $69.70M $83.20M
YoY Change -16.23% 35.73%
Cash & Equivalents $69.70M $83.20M
Short-Term Investments
Other Short-Term Assets $55.00M $38.10M
YoY Change 44.36% -56.16%
Inventory $415.6M $322.0M
Prepaid Expenses
Receivables $444.8M $371.8M
Other Receivables $0.00 $18.30M
Total Short-Term Assets $985.1M $833.4M
YoY Change 18.2% -4.65%
LONG-TERM ASSETS
Property, Plant & Equipment $443.0M $322.8M
YoY Change 37.24% -2.57%
Goodwill $1.671B $1.152B
YoY Change 45.06% -1.18%
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets $75.50M $72.00M
YoY Change 4.86% 5.42%
Total Long-Term Assets $2.688B $1.905B
YoY Change 41.13% -1.48%
TOTAL ASSETS
Total Short-Term Assets $985.1M $833.4M
Total Long-Term Assets $2.688B $1.905B
Total Assets $3.673B $2.738B
YoY Change 34.15% -2.47%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $182.1M $134.2M
YoY Change 35.69% -7.77%
Accrued Expenses $314.0M $244.7M
YoY Change 28.32% -3.24%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00
YoY Change
Long-Term Debt Due $103.5M $11.30M
YoY Change 815.93% -86.85%
Total Short-Term Liabilities $599.6M $391.3M
YoY Change 53.23% -19.42%
LONG-TERM LIABILITIES
Long-Term Debt $1.203B $707.1M
YoY Change 70.06% 4.28%
Other Long-Term Liabilities $259.7M $212.5M
YoY Change 22.21% -13.9%
Total Long-Term Liabilities $1.462B $212.5M
YoY Change 588.09% -13.9%
TOTAL LIABILITIES
Total Short-Term Liabilities $599.6M $391.3M
Total Long-Term Liabilities $1.462B $212.5M
Total Liabilities $2.069B $1.311B
YoY Change 57.82% -7.06%
SHAREHOLDERS EQUITY
Retained Earnings $1.943B $1.760B
YoY Change 10.4% 8.79%
Common Stock $335.8M $353.9M
YoY Change -5.11% 2.28%
Preferred Stock
YoY Change
Treasury Stock (at cost) $230.7M $304.9M
YoY Change -24.34% 36.18%
Treasury Stock Shares 2.459M shares 3.218M shares
Shareholders Equity $1.604B -$381.9M
YoY Change
Total Liabilities & Shareholders Equity $3.673B $2.738B
YoY Change 34.15% -2.47%

Cashflow Statement

Concept 2017 Q2 2016 Q2
OPERATING ACTIVITIES
Net Income $30.50M $39.00M
YoY Change -21.79% -19.25%
Depreciation, Depletion And Amortization $22.80M $21.10M
YoY Change 8.06% -7.46%
Cash From Operating Activities $53.40M $69.10M
YoY Change -22.72% 17.12%
INVESTING ACTIVITIES
Capital Expenditures $12.60M $14.20M
YoY Change -11.27% -204.41%
Acquisitions $740.6M
YoY Change
Other Investing Activities -$740.3M $500.0K
YoY Change -148160.0% -101.23%
Cash From Investing Activities -$752.9M -$14.50M
YoY Change 5092.41% -73.25%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $0.00
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities $668.9M -$59.20M
YoY Change -1229.9% 5.34%
NET CHANGE
Cash From Operating Activities $53.40M $69.10M
Cash From Investing Activities -$752.9M -$14.50M
Cash From Financing Activities $668.9M -$59.20M
Net Change In Cash -$30.60M -$4.600M
YoY Change 565.22% -91.05%
FREE CASH FLOW
Cash From Operating Activities $53.40M $69.10M
Capital Expenditures $12.60M $14.20M
Free Cash Flow $40.80M $54.90M
YoY Change -25.68% -24.38%

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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:10px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">General</font></div><div style="line-height:120%;padding-bottom:8px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Basis of Presentation</font></div><div style="line-height:120%;padding-bottom:10px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The accompanying unaudited condensed consolidated financial statements have been prepared by Teledyne Technologies Incorporated (&#8220;Teledyne&#8221; or the &#8220;Company&#8221;) pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures normally included in notes to consolidated financial statements have been condensed or omitted pursuant to such rules and regulations, but resultant disclosures are in accordance with accounting principles generally accepted in the United States (&#8220;GAAP&#8221;) as they apply to interim reporting. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes in Teledyne&#8217;s Annual Report on Form 10-K for the fiscal year ended </font><font style="font-family:inherit;font-size:10pt;">January&#160;1, 2017</font><font style="font-family:inherit;font-size:10pt;"> (&#8220;</font><font style="font-family:inherit;font-size:10pt;">2016</font><font style="font-family:inherit;font-size:10pt;"> Form 10-K&#8221;).</font></div><div style="line-height:120%;padding-bottom:10px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In the opinion of Teledyne&#8217;s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to present fairly, in all material respects, Teledyne&#8217;s consolidated financial position as of </font><font style="font-family:inherit;font-size:10pt;">April&#160;2, 2017</font><font style="font-family:inherit;font-size:10pt;"> and the consolidated results of operations and consolidated comprehensive income and cash flows for the three months then ended. The results of operations and cash flows for the period ended </font><font style="font-family:inherit;font-size:10pt;">April&#160;2, 2017</font><font style="font-family:inherit;font-size:10pt;"> are not necessarily indicative of the results of operations or cash flows to be expected for any subsequent quarter or the full fiscal year. Certain prior year amounts have been reclassified to conform to the current period presentation. </font></div><div style="line-height:120%;padding-bottom:8px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Recent Accounting Pronouncements</font></div><div style="line-height:120%;padding-bottom:10px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In January 2017, the Financial Accounting Standards Board (&#8220;FASB&#8221;) issued Accounting Standards Update (&#8220;ASU&#8221;) 2017-04, Simplifying the Test for Goodwill Impairment, which eliminates the computation of the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities will record a goodwill impairment charge based on the excess of a reporting unit&#8217;s carrying amount over its fair value. The new standard, will be effective for the Company prospectively for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We expect the adoption of this standard will reduce the complexity surrounding the evaluation of goodwill for impairment. The impact of this new standard for the Company will depend on the outcomes of future goodwill impairment tests.</font></div><div style="line-height:120%;padding-bottom:10px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In March 2017, the FASB issued ASU No. 2017-07, "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost." This ASU requires the service cost component of net benefit costs to be disaggregated from all other components and be reported in the same line item or items as other compensation costs. The other components of net benefit cost are required to be presented in the income statement separately from the service cost. This ASU is effective for fiscal years beginning after December 15, 2017 and for interim periods therein. The Company is currently evaluating the impact this guidance will have on the consolidated financial statements and footnote disclosures, however, Teledyne does not believe this ASU will have a material impact on its consolidated financial position, results of operation or cash flows.</font></div><div style="line-height:120%;padding-bottom:10px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most current revenue recognition guidance. The new standard, as subsequently amended, is effective for Teledyne for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted for interim and annual reporting periods beginning after December 15, 2016. The new standard can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption.</font></div><div style="line-height:120%;padding-bottom:10px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Under the new standard, an entity recognizes revenue when or as it satisfies a performance obligation by transferring a good or service to the customer, either at a point in time or over time. Under the new standard, Teledyne expects to recognize revenue over time on most of its contracts that are covered by contract accounting standards using cost inputs to measure progress toward completion of its performance obligations, which is similar to the percentage-of-completion (&#8220;POC&#8221;) cost-to-cost method currently used on certain of these contracts today. &#160;Therefore, adoption of the ASU will primarily impact our contracts where revenue is currently recognized using the POC units of delivery and milestone methods as we expect to recognize revenue for these contracts using the POC cost-to-cost method. These contracts represent approximately half of the revenue currently recognized under the POC method. Also, to a much lesser extent, we expect certain bill and ship contracts for custom products and products sold to the government will be recognized under the POC cost-to-cost method. Accordingly, the resulting impact being revenue will be recognized earlier in the performance period as we incur costs, as opposed to when units are delivered or milestones achieved. This change will also impact our backlog and balance sheet presentation with an expected decrease in inventories, an increase in accounts receivable (i.e., unbilled receivables) and a net increase to retained earnings to primarily reflect the impact of converting certain bill and ship contracts and contracts currently applying the units-of-delivery and milestone methods to the cost-to-cost method for recognizing revenue and profits. The percentage of Teledyne revenue recognized using the POC method was </font><font style="font-family:inherit;font-size:10pt;">30.5%</font><font style="font-family:inherit;font-size:10pt;"> in 2016, </font><font style="font-family:inherit;font-size:10pt;">31.2%</font><font style="font-family:inherit;font-size:10pt;">&#160;in&#160;2015,&#160;and </font><font style="font-family:inherit;font-size:10pt;">28.7%</font><font style="font-family:inherit;font-size:10pt;">&#160;in&#160;2014. </font></div><div style="line-height:120%;padding-bottom:10px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company continues its evaluation of the expected impact of the adoption of this standard on its consolidated financial statements, related disclosures and the transition alternatives available, Teledyne will adopt the standard in the first quarter of fiscal year 2018. Furthermore, Teledyne expects to disclose the transition method and the effect of this standard on our consolidated financial statements in the second quarter of 2017.</font></div></div>

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